When officials launched startup incubator and new business accelerator HealthTech Arkansas in 2018, they knew the potential was significant. Four years down the road, expectations have been far exceeded.
The statewide program seeks to bring new medical innovations to market by offering something many competitors don’t: pilot projects in hospitals and clinics to test early-stage products, services and software.
“There are lots of other healthcare-focused accelerators around the country,” said Jeff Stinson, director of HealthTech Arkansas. “Most of those are based on receiving high-value mentorship from corporate partners in the healthcare space. But we differentiated ourselves by saying, ‘Let’s see if we can build a program around healthcare providers and not big med tech companies.’”
There are 10 state-based hospitals and health systems partnered with HealthTech Arkansas, which vets and screens companies that need real-world experience to improve their inventions. Partners include Arkansas Children’s Hospital, Arkansas Heart Hospital, Arkansas Urology, Baptist Health, CHI St. Vincent, Conway Regional Health System, Mercy, Northwest Health, OrthoArkansas, St. Bernards Healthcare, University of Arkansas for Medical Sciences (UAMS) and Washington Regional Medical Center. The state of Arkansas also supports the accelerator program.
“If you’re a startup founder and you’ve developed some new technology to be used by a hospital, the thing that you want and need the most is for a hospital to give you a chance, to bring that innovation into the hospital and give it a shot and get some feedback on it,” Stinson said.
But it’s not just waiting on a company to come to a hospital with a solution. Stinson said his group now solicits suggestions from workers at hospitals and clinics to propose their own problem-solving ideas.
HealthTech Arkansas launched an internal innovation program 18 months ago for Arkansas Children’s. It is run in partnership with the University of Arkansas’ Office of Entrepreneurship and Innovation, Startup Junkie of Fayetteville and Conway-based The Conductor. They’ve trained 40 innovation captains to serve as ambassadors for ideas, launched a venture studio, and have plans for a pediatric innovation summit later this year. So far, 94 invention disclosures have been created for advancement, seven of which have patent applications in place.
“We’re doing a lot of different things to move those ideas forward,” Stinson said. “So we’re protecting the intellectual property when we can. We’re helping to assess the market size and competitive forces. We’re helping to secure external validation funding to put money behind these ideas to move them forward. We’re engaging regulatory experts to help us develop regulatory pathways for these things.”
On another front, UAMS Northwest and UA have made the final cut to receive funding from the Biden administration’s Build Back Better grant program, which could result in $75 million being awarded to the state for various healthcare innovations.
HealthTech Arkansas also lines up investors to consider putting venture capital into the startups. Stinson said there have been investments in 21 companies that have come through their cohorts in four years. Three have “exited” or been bought by larger firms and paid out.
“Those have generated very strong investment returns for us,” he said. “And the other 18 companies that we’ve invested in? We’ve lost none of them, which is a pretty remarkable track record. All of the remaining 18 are still growing and doing well and increasing their market value month by month.”
In early April, HealthTech Arkansas will host a hackathon in Bentonville to present five challenges that Arkansas Children’s faces. The teams will choose a challenge, work toward a software solution, and hopefully create a startup company in the process. Cartwheel Startup Studio in Northwest Arkansas, backed by the Walton Family Foundation, is a partner. After the hackathon, Cartwheel is expected to embed one of the teams in its studio for development.
“We think we have the opportunity to work with Cartwheel to do this over and over again,” Stinson said.